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2/29/2012 7:26PM

The Big Interview: Questioning the Amway Way

Amway Chairman Steve Van Andel and president Doug DeVos sit down with the Journal's Dennis K. Berman to discuss Amway's sales growth, its expansion overseas and legal cases that continue to dog the company.

This transcript has been automatically generated and may not be 100% accurate.

... it's a good sales all ... I'm Dennis Berman of Wall Street Journal ... the interview with Stephen and though and that it lost the chairman and has spent the wee family ... thanks for being a nice way ... in which a conversation ... ten point nine billion dollars in sales for the two thousand eleven ... a big number probably the biggest in history Mahaney tells them ... where that coming from ... the Wilson's coming not from the US ... but from abroad to ... take this little bit deeper into that ... and it's ... been a great year for seven years when we've had seventeen percent growth which for the past years and been outstanding ... I think the easiest thing to say is ninety percent of our business comes outside the US ... but economists still spread across the world because none of that up to markets are growing including us ... so then goes whether it's in the ... the the European car of the world in part of the world in the Americas were growing all around the globe ... so why is it wrong is that the ... changes in economies in Asia sickly and in India and China are the markets that Malaysia and in Asia ... or is the of bad economic times the ... insular them or less in Western ... democracies is that having an impact ... we brought down in your office and say where's the seventy percent come from what what's the answer you get ... well well really it's kind of big picture the Amway business opportunities to connect with the entrepreneurial spirit that people have all over the world ... they're they're so a basic ... no end in sight almost a desire to aspire to something more and ... and and a desire to have a business of your own ... and were able to to connect with that and in a way that's relevant in the marketplace today aam in like Steve Severin growing in developed markets like the United States for grill ... growing and developing markets like ... India or Brazil or ... and and so were China ... in ... but there's still that that that same connection happens in all markets around the world people are willing to work hard and ... in as a business for were able to provide an opportunity ... they're still relevant for people say hey this would be a way for me the ... the thing go ... well but you learn about the work ethic ... abroad when you see people and in India ... China ... home to be honest I tested that they are willing to work harder than people United States I know it's probably apologies to say ... but of ... the art you know with you the GDP numbers they are hungry and we are in this country ... with which your experience ... you know we we really found that the entrepreneurs around the world were carved regardless of what market there ... so we can work hard in the U S Reach and work hard and China in an all over ... and there really is what ... what our focus tends to be because ... we talk about the overall numbers and what the overall businesses but our focus really is on making sure that ... are are helping our entrepreneurs become successful because if our entrepreneurs are successful than the overall business ... the series in optimists say that the people in China where the fact that the US ... your friendly ... merger from it's a different virus so what's unique about ... its ... China sales person compared to someone in the west of the notice that if it takes a ... different approaches from the station environments ... Monday we received ... we see differences in different cultures and you know that thing is I remember going into our first Easter what country whether we thought ever the concept of the American dream is something that would translate into a different culture ... for all or or ... or a different ... system differ marker were ever was but what we found is that there are people all over the world ... who really wanna wanna help themselves they wanna set goals for themselves they wanna become successful in their own right ... and there seems to be mute will across the recall chair ... and sofa going to try new with it the way they work ... better for the same reason some in the US is determined to help themselves to come to the right um ... it taught us the ice to the consumer products market ... of a sailing ... people ... aren't ... family with everything it doesn't sell side bars a consumer products through a direct selling ... of Salesforce of what's happening right now ... of what we're seeing in the US is quite interesting customers are actually trading down to lower priced white of Beit branded goods we see PNG struggling through a lot of ... times right now ... is consumers really don't want to spend for brand names um why do they once and for even a manly brand name when making get something up for cheaper at Walmart or local supermarket ... you know people really when they look at spending the money they will continue to value they're looking to get value for whatever they spend ... reading our products have a tremendous amount of deluge person when you look at the neutral and products from ... and what the neutral and products can the nutrition products can print your health screening when people look at our state ... to recognize ... that ... they're there they're product that that brings failure for third ... time for you and we find the dollar the little ... lady from the pricing overall sickly and then in the U S market prices are ... being pushed down because consumers they just don't ... want ... to spend on the branding ... well and again and it all goes back to value I think it depends a little but on ... the types of products they have this well because people are very willing to spend nothing for beauty they're very willing to spend to make sure they can ... to ensure that they're they're healthy ... on the may not be quite as willing to spend as much to wash the clothes ... but that's just ... what they're working ... right um ... and what advice would you get to ... a ... PNG and the summit of the consumer price ... data company you can say what everyone has to happen is that we try to stabilize at our business though ensure that the ... intended to get too far outside of ourselves and give others ... advice or their models are in the underprivileged in our show ... but they like us have to know identify links he was saying in the marketplace where people are ... are seeing value in a proper to what they have to do to deliver immediately have to do that has any changes in consumer behavior that you're responding to choose developing products and ... what is today's consumer he had to ... pay a fixed roof is largely hire female ... by a panel is this person ... well ... it's ... hard to think that one no one picture because are dealing with market sale of all over the world ... um but you get if you did you did try to generalize and its people who want ... of products or or in our case and this is happening to meet their lifestyle their goals where they're trying to Gillis very individualized ... so if I'm trying to him improve my health of I'm trying to ... secure my skin and and a better way is the consumer especially the female in the meeting area ... they're looking at ok help me ... I want some help I want some personalized service to match our business model ... really ... adds value to the products because because the product information is there that that ... the customer support and feedback to follow up with their ... tweaking given the Pursell recommendations in and help ... to make sure you using the product directly in a way that ... will give you the results are looking for and so ... we try to expand the whole value proposition for a time to to encompass the whole the relationship we talk about ... their experience ... with the parka with the business okay now of the business opportunity effective recently ... inked a seminal think it's been approves of by the Court of its new approval ... cost me about what that someone means that ... roughly defined ... in yuan not neither admitted nor denied any wrongdoing all that usual ... jargon ... of but you have made announcements about changing the way you do business degree for salespeople ... in the field so what ... was and wait to see doing not in the best way before and how is it changing that ... well first ball so you talk about a number of years ago ... you know we said a sweet we were not as good a job that could have been training ... and and and relieved ... helping people using technology using ... with the tools that we had to train people to bring your email to love about how they talk about the business and how a talked about ... you know the the the products ready and so we made it an investment and that we leave the ... bugle on your ... mobile technology on your smartphone ... year-end and be able to access for free ... account data information training ... to be able to bring up to speed in and I think of anything we look back into we weren't doing that well enough alone invest and that ... everyone to make sure we told their story in a way that everybody ... could fall so when they were talking about the only business ... we were leaving we were talking bout of business with our toddler products ... and became easier for all this to be consistent ... I've been telling the story and it seemed that to ... part of that issue was that ... the bees from the court's view is that ... of movement toward selling the opportunity and as opposed to selling the product of which has been a long standing ... complain about ... Amway and opportunities to put it ... up ... just tell me of the fat sure ... that as ... well as being it is being really clear about what the opportunity is right ... and we wanna help people be very clear in and we are talking earlier got ... a lot of people joined in with this is something of fifty percent reshape ... the US who are studies that said ... they came in just to buy some products and help you to some friends and family ... and about thirty percent came in to make a little extra money and about twenty percent came into the look or if more full term opportunities so we did talk to ... that whole range not just to this person about ... um what what they can make full time when some it may be interested in something else ... and so being more clear about what the opportunity ... can deliver in one estimate a port to eventually deliver an athlete ... especially especially when it takes I think there's a lot of time ... when people are are talking about the opportunity ... they ... they don't must really say that they stole the hard work it's not an easy thing to become ... an Amway distributors in the successful as an Amway distributor right and I think it's very important that the people asked him to go over work to do that ... and ... and I think that's worth ... if anything you see some of the ... some of it there's a disconnect there may be a disconnect there ... but as far is the opportunity the opportunity is always really been the same that and must use old product ... you can become successful there there is no success right so it was really interesting um I broke the story about the number one in which should be very best FireWire here ... and and and and it is is to be the email I got from people ... it is so divided the now am leak and it doesn't look that the civilized time the heart of the founding families of the company ... it was so divisive that ... the people said how dare you be sucked into this up in its gaming and other far less thank you so much for exposing us to do a great salesperson this is Holly Chen the Number one sales person ... distributor for newbies ... um what to say to people in the ghetto all decline and fall but I think it is that this affair ... of question one that has to be stressed about the company just that people have that feeling that somehow it's not ... um quite ... um ... shares of the people ... in the field so ... I'll be live without their families they are ... well it ... the the first thing this is an inveterate over fifty years ... ago in a business opportunity has tried and true improvement ... you know in the United States in a market rollover the world ... and again I think the article was trying to recognize in earlier discussions wheel under the age of telling people exactly what it is and how they connect work in reward initially feel so they ... they didn't have that connection in the FATA with me something different ahead never thought they're going to have a different experience than they did ... it in them and we feel badly for that ... and so our focus is to make sure everybody ... every customer ... every prospect everyone who joined business has a good experience enormous challenge yourself to make the experience better ... Steven bought some ... in in just a fall along with dogs is they're they're actually a lot of people that we need ... over the years that used to be an Amway ... now we're ... going on in their lives to do something else to come back to us nicely in all ... I remember one time there when I remember I learned how to sell something I learned how to connect with other people when I had a great experience ... neither ended the day ... the fish turns ahead ten years ago fifteen years ago something a I've remembered my whole life ... if we can make that kind of connection that's what we we try to do just that personal rules of ... sales ... of you know I think that that you use ... directly at the North American sales operation has right ... of this this and it's a selling company ... um ... what you guys learn about sales and initial personally ... known to ... I think still something we do all they wanted somewhere that you do all they want to read because ... you're a great organization that you were for euro is talking about it and I think they're gonna do the same thing ... but for us our our day really is ... looking at all of our distributors around the world ... talking with them trying to help them become successful ... um I don't know exactly how you define it or where the hell you talk about that ... but to me that selling the Amway business acumen to be a lot of people is there why little ruled that maybe learn from your father's or rather someone to ... in the business overall class to be something carrying a lot less rusty Steve contacted some people ... as a buffer filling in a twenty watt we looking for is about ... building relationship in a way that you connect with somebody say how can I help you to the being of service ... and so I think you have that experience we see somebody who is ... in and genuinely her whole life is ... has been out there trying to attend a to help you and and that's what he's talking on the front ... leaders in our business to honor on a regular basis our model is built ... that if you do a good job helping somebody else ... they know the defining right you to serve the customer Mr. the prospect of Hwy ... together work with that with ... our Salesforce Chief ... and the move isn't something you think that people have lost of the ability to sell ... the mean and wasted leverage is generally ... um ... this century and online returning to this thing but what I am with ... Isaacson's off that people ... have lost the art of salesmanship if you go in and buy a pair of shoes or didn't go to ... by a car or computer system or what have you um ... we've ... we've lost that thing that Dale Carnegie you ... have a constructive this on a hundred ... over many years ago was it a CEO I actually don't think that we flushed it I think that over time though it's changed a little the end we phone man ... with ourselves ... you know we kind of joke a little but that we come to consider are sold from the original social network because fifty years ago we had people connecting with people ... but what we didn't have fifteen years ago that we have today is technology right away to connect a lot faster LightSquared kernel of differently ... I think that's how showing changes is well I think ... from how we sell is probably ... it is is probably are the active cylinders pro would not so much different from how we sell with the technology that we use today don't make about a lot of what he mean by that I mean firstly I think I can ... make a better sale a cue from looking at my time with this technology and ... technology comes in is the if if you have on any any sort of mobile device right now there's an Amway app that you can portion of somebody ask your mother product you can actually push a button ... and say here look at this and it'll show you talk about the product it'll tell you what it is and ... and what it can do ... I think that's a ... different format in a different way to ... be able to sell something that fifty years ago ... reduced and have learned in we can bring together your your Symbian face-to-face is still critically important to have and what technology is is that cool to enhance their relationship or are you can stop ... Justin for making the wrong class the news and re write ... trade is an issue that this is ... just as you can get to the facts right from a company we've elevated and verify and we are and can climb bags that enhances ... the overall experience and so people can trust them I can have confidence ... in the product ... in India right what percentage of the of the end products ... are sold to the general ... public and not ... to the ... and we salespeople to Ron ... Paul is or that or is it jealousy can find exactly what that number is but it's you know ... it's a large bets a large percentage roughly say our research five odd and least half or more ... it would go to an end user and ultimately ... all that goes to an end user even of somebody happens to be a distributor though their own best customer ... so I would say ... and strictly speaking standpoint a hundred percent ... because everyone at the end the day and as a customer and they see value in the product will someone buy it right ... now aam ... in da guys have ... had some troubles there in India ... they don't ... like which are doing computer was an update about the market ... haha for ... preferred up that is what I was there more recently been state then you are given a quick update ... the business is growing ... the business is very strong our reputation the marketplace remains strong ... it's worth were light orange tie me years ago ... the method is a little mis understood a little different ... in different ... states who are asking questions about how we operate in whenever we engage and talk with them about ... how we operate and what we do ... wheat we have people go OK and I'm starting to get it ... right and and understand it but to the nature of the marketplace there those questions may get Aston different places and and and there's no one simple way to answer for the whole country right and so we have to keep ... explaining and answering in ... and talking about and what we do is ... we make adjustments we did in China we did in the US will will make adjustments in how we view things ... in India ... it isn't and ... wasn't getting those questions last night the theme of this on the UK ... I think you'll agree to publish a list of sort of the ... graduation rates if you will of certain levels of of of the sales ... force ... um and that showed ... a ... good stock to make a lot of money ... to make a little money that's easy ... the making real big money ... you know the odds are for the not great ... um ... what whatever does with with you ... planners and Justin ... why is it you know this isn't this is the boxes and this is a worker toward it and so in in India one of the things that that we've been we've gotten some of the market as well as ... get in and when the business started uni didn't give by someone or share by couple products with no technology and business is changing they can even entry fee income like that ... Facebook will social network says ... come on and joined ... by a product you know ... you can access all the information they have to buy on line so we we waived all of our entry fees ... we waved renewal fees fees to have to do that sort of thing because ... in days past though they're a lot of costs associated with those costs of comedown apply where ... we can change that and generally ... that's the main thing that people say can you know is the risk of joining ... a business opportunity will earn zero right we can say the search was euro for ... coconuts for a moment ... um ... you guys on the CIA are active ... in the business community ... in your home to Michigan ... in the country overall ... um ... how would you guys described the current state of of the U S economy in the way in which businesses to ... be more scenes ... to which you can do what you will think it ... needs to do ... well I'd I think we all know that the economy took a dip ... we are loud and a half ... were there ... but in the wheels and see things improving and so for us we can see it in our business as well ... in a lot of times people look at us and say well maybe when the economy's down your business the better ... maybe when it's better your business ... doesn't go the other way and we've never found a correlation one way or the other ... the only thing that we do find in the near where businesses when the economy coming goes down sometimes the order of mild ... go down along with ... the with the more people coming into the business and being interested ... and so we kind of ... state what the people are are interested in coming into the business ... um ... they still have a positive out work if they have a positive well more than we think there's optimism inside the car and ... and that's how we feel good but were the worst is when you agree ... with the Republican critique ... of the present Obama ... of that he is hostile to business ... so we we think that it is really important ... to make sure that the the business that you have in your own country is very competitive with the rest of the world ... doing business around the world now ... having a ... the the the on the platform that simple for Everbody Chavez's can compete is very important ... and as long as our ... our group in Washington allows us to compete with the rest of the world we're going to do this was a very diplomatic way of saying I think you'll agree that the public and ... fifty this is the Fed it's ... fair to say ... hey ... I think that we need to have a critical platform a level playing field with a Russian Renault ... is that one or two things that you all would like to do for the U S economy ... and specific acts ... over to ... well I think you know you should trust but a level playing field it was rather then goes back to the environment has created me ... know what is the tax structure was the regulatory sure sure what is that ... the general mood of the country and is as good as a part of our future going forward ... or is this is bad because it did something here or there typically oh one or two examples you are ... he was the chairman of the U S Chamber of Commerce for clandestine requests presenting pale ... ale and intensities shoe is seen as so many people ... in business are ... doing great things every day in their communities for their employees for the customers ... and so we look for is an environment that Tanner recognizes has ... no business is really all the people ... who are not just ... numbers it all the people ... in the country thereby releasing this is all a way to help people ... with good products with good jobs with ... opportunity for the for themselves up for the families ... im Basci environment that we want and frankly that's the environment that PC and a lot of countries around the world well I I think that that ... is probably of ... a fair observation ... prison Obama has been ... having served in an embracing of the business community times seemingly hostile aam humid here is ... how we are the country ... um and we see where unemployment is today ... aam ... I just don't know where the fine line is ... you ... is that what's happening in America now is the problem regulation for the bigger man crew changes going on ... around the world that you guys are saying in some ways apart ... where labor markets are getting so Global isn't the cost of labor and in fact the knowledge to unload we strive products and change ... is being distributed in a way that forcing of ... pressure from the U S economy so ... regulation diverse macro factors where you guys ... breathe I stand ... by you know ... it's it's hard to pinpoint either one doesn't think they're both important ... voting ... definitely the more regulation more pearls of assistance to go through the less competitive they are the less competitive they are usually happens to be in one particular country versus another ... so you're always comparing yourself as to how we usually can do business compared to ... your competitors in another country ... I think that's really important that we make sure that ... that ... that we allow American business ... to be as competitive as possible in the global arena because that is where businesses today Brian ... and I think the TSA says it is well prepared and ... the creativity the engine and could be that ... the ability to solve problems in areas is still there ever present ... and so I think and I think and sometimes it's what we do ourselves we joke about that and are there on business and I guess um does sometimes the things we do ... know her more than help me make decisions and I don't go the right way ... it can stay sane while we really wanna do is unleash the entrepreneurial spirit Llano and Nish animation we wanna do we stay creativity ... and not put up barriers and given the Lachman that the really good news for the entrepreneurs ... everywhere because the entrepreneurs really ... I think or what what drive a lot of the ... a lot of the new business ideas of drive a lot of the business ... going forward and if you want to generate ... new business ... the new Bond Fund and or is that ... that was the optimism towards the future and the more ... the more pressure they have on your taxes or regulations the board of course Abbott thinking about this ... to me ... to ... call the week on screen or ship is what we ... we will be willing to say is that there are any other jobs for for people ... Chavez is another label for or perhaps in certain cases ... an economy that ... isn't as vibrant ... as Sydney's ... not everyone's agreed on screen or we we wanna believe that they can be in this country ... but he began the I'd say that they're not ... not everyone agreed entrepreneur but if you don't reckon history new look and were the majority of job divorce been created it's been creeping they've basically been created through entrepreneur ... in the in the IPO when we talk and for the coming of unleashing innovation inside the company so ... maybe in a different context you have an entrepreneurial spirit him an innovative culture inside the company ... that allows it to go the next level ... but ... going back to some the other conditions is that this is unwilling to invest in that new idea ... are they willing to take that risk and if the environment is un clear to them or the level the playing field isn't level ... that so much more difficult decision for a company that a ... you know then you know them saying I'm there's even a U S travelers even as China to make of this is that right now in the middle of that with that mean right now because there is a bit of uncertainty as to what the future holds and ... then what it's gonna look like I was gonna go ... there's a resistance to the committee wanted us to live towards the future than ... to wait and see ... mom ... different reasons for different businesses and in different places but that's what ... makes her more differ part so it's a bit to get the facts here the an Amway ... in years but the families of long-time big salute biggest owners of the two other of the party of the candidates ... Mitt Romney's for Michigan year for Michigan you guys have to be Romney Cup Strine ... Kelley yes it's a ok the answer is yes the we've we've a ... we leave indicator ... and ... can you is it may be aware is someone who's ... been involved in Michigan insurer come across ... Mr Romney ... he does not seem to be connecting with a lot of Americans um ... what would you tell them that some of them are watching for two thousand and twenty ... why does it does this bother to tell him of why Mitt Romney ... of would be in the past ... well I think I think um here's the tools to do the job I think he has experience is that that are necessary as the keys Neil has a track record he's been able to demonstrate his abilities to get that done and what ... do we Pelletier there's lot of that people running on ethanol differed areas who's going to divest from ... Steven thought ... same same idea and I think it's not only the tools but you look of that summer the idea is to record some of the ideas to ... to create and allow that entrepreneur and the ... soon to be successful I think that ... the ... Romney has the convertible peso up ... some of all up ... you guys are are in for Romney will see if he can connect this is his not knowing why now is not doing enough to ... right now the Michigan primary ... is tomorrow ... I you guys are in New York I think that speaks volumes to when they get away from ... um dual goal ... it will be open to it ... any last thoughts up from you guys ... and where a year the company is headed ... some two percent ... growth ... I'd say generally not sustainable of the company of such scale I'm sure you guys for today for ... so tell me ... why I am wrong ... the seventeen percent is tough but you know we've also grown lovable as twelve years ... I think that ... is as we can look towards the future we look at the trend continuing ... we've got a lot a wonderful entrepreneur is up there on the ground or distributors all over the world that ... have been successful and we're going to continue to help them and that ... is really the group that the drive to forward ... and an array of a Korean adventures attitude of Silica was the better ... you know we we joked we ever get this figured out it would really be a good business if I was in no idea there some way we can enhance it ... can invest I think the fun that we have a working together and working with all of our colleagues in and leaders in the business to ... see what we do to make it better ... okay well I'm sure he'll have the cry of opportunities to do that ... Stephen enough and that the Goss thank you ... for joining us